David Cameron’s Conservatives won an unexpected election victory in Britain on May 7. They captured a clear majority – taking 331 out of 650 seats.

Naturally, U.S. Republicans are now looking at Cameron’s triumph to see if there are any lessons to be learned for 2016.

And while the two countries differ substantially in both political systems and social factors, there are indeed a few things the GOP should note if it wants to take control of the White House.

Learning to Play Nice

Like many U.S. Republican leaders, including the Bush family, Bob Dole, and John McCain, Cameron leads his party from the center, rather than from the right. And like the British Conservatives, U.S. Republicans have tended to nominate leaders from the centrist wing of their party.

But unlike Cameron, GOP leaders have been less careful in relations with the right… and therein lies an important lesson for 2016 Republican hopefuls.

In his early years as head of his party, Cameron had a program of “modernization” that annoyed the party activists, even though it broadened the party’s base to include more women and minorities. But in recent years, Cameron has been careful not to annoy activists on hot-button issues, particularly policies on the European Union and immigration.

In fact, he has promised a “renegotiation” of the terms surrounding Britain’s membership in the European Union, followed by a referendum in 2017. On top of that, he’s also promised a reduction in the level of immigration, as well as a negotiation with the EU on the rights and benefits of EU migrants who, under EU rules, can move freely to Britain.

Cameron is also courteous to both activists and the right wing of his party, making it clear that he understands their concerns and respects their positions. But previous British Conservative leaders, such as Harold Macmillan, Edward Heath, and John Major, had much less cordial relations with the right of the party, and U.S. Republicans have had similarly strained relations.

George H.W. Bush broke his central election pledge not to raise taxes (and allowed domestic public spending to soar), while George W. Bush and John McCain were famously disdainful of the party activists’ views on immigration – an important factor in the failure of immigration legislation in 2007 and 2013.

Finally, Mitt Romney, while playing lip service to activists’ views, had an unfortunate lifestyle and personal style that failed to connect with many voters.

Of this year’s candidates, Jeb Bush appears to be going out of his way to alienate his party’s base. His strongly liberal position on immigration and his backing of the Federal “Common Core” standards in education are anathema to those concerned about leftist political indoctrination.

Above all, Jeb needs to learn from Cameron and the failings of Cameron’s predecessors, otherwise it’s likely that much of the party’s base won’t support him in November 2016.

The Value of Spending Cuts

The other area in which the Republicans can learn from Cameron is in sheer competence, especially in the economic sphere.

In spite of having to govern in a difficult coalition, Cameron has stayed true to his austere public spending plans during his five years in office. Indeed, he’s made deep cuts in welfare and has been rewarded both by an economic recovery and a stabilization of Britain’s credit rating.

What’s more, he won the election on a promise of further public spending austerity, no rise in the major taxes, and a balanced budget by the end of the next Parliament.

By avoiding the excessive public spending of both Bushes and the electoral tax bribes of George W. Bush, Cameron has realized economic performance that exceeds the rest of Europe – and secured his re-election.

In contrast, the GOP record isn’t good. The only recent, successful cut in public spending – the “sequester” – was denounced by many Republicans because of its effect on defense spending, even as the Democrats were denouncing it for its cuts. In reality, though, it has pulled the budget deficit back from over $1 trillion to half that amount and has at least postponed a serious fiscal crisis.

Thus, the Republicans should learn from Cameron. By tackling the problem of soaring deficits in social security and Medicare, they can stabilize the budget, improve economic performance, and gain a reputation for straightforwardness and competence that’s worth its weight in gold come election time.

Cameron may be a moderate, but he’s the sort of moderate who wins elections and pulls the country’s destiny moderately in the direction his supporters want. That’s a lot better than either losing elections or selling out.

Good investing,

Martin Hutchinson

For 27 years, Martin Hutchinson was an international merchant banker in London, New York, and Zagreb. He ran derivatives platforms for two European banks before serving as director of a Spanish venture capital company, advisor to the Korean company Sunkyong, and chairman of a U.S. modular building company. Learn More >>

Comments (5)

Just read your article above. Commented on your recent article floating the idea of getting an outsider to stand for president.
As a Brit living in France, the American system never ceases to amaze in its total cost and effort and potential for corruption, moral or actual.
I replied to one of your commentators who was a Republican activist working on the Beltway, ex intelligence, he said.
He was not very complimentary about your article and effectively told you to stick to financial matters.
Unfortunately he misinterpreted your article out of ignorance or otherwise [probably the latter-old habits die hard].
He didn’t seem to realise that an outsider probably has a much better and measured view than a died in the wool politico.
He and his ilk are the problem. Perhaps they need another 1776
When was the US a proper democracy by the way?
Good luck.

I think that what the author is looking for is smaller government. The fact of the matter is, Republican Presidents have only paid lip service to having a smaller government.

Presidents have little control over the budget that they inherit the first year. Clinton, with a Republican Congress, balanced the budget for the seven years that he had influence over. In GW Bush’s first year he disregarded the Clinton Budget and overspent into the red. Bush went on to outspend every previous President in our nation’s history combined including adjustments for inflation.

Reagan, after famously cutting taxes to disastrous consequences, then made the largest peace-time tax increase in our nations history. He also outspent every previous President in our nation’s history combined including adjustments for inflation. When he entered office there was a $1 Trillion deficit. When he left office it was $3 Trillion.

In fact, the last Republican President to balance the budget was Eisenhower in 1957!

At the end of the day, Presidents are hardly Democrat or Republican. They are politicians. And they do what is in their best interests, meaning paying back whomever put them in office and will put them there again. ‘Whomever put them there’ does not refer to the common man, but corporate interests and the ultra rich who stand to make even more by supporting them.

If smaller government is what you want then you definitely don’t want to elect a Republican to the White House with our current, Republican, Congress. To reduce deficit spending, elect a Democrat to the White House with this Republican Congress. This is the ONLY formula that history has proven effective at reigning in spending!

Haha I see that I forgot to include a paragraph on Obama. Clearly Republicans in Congress have been attempting to shrink government under Obama. Since Reps took control of both the House and Senate, deficit spending has dropped by more than 50% (or even more, if you believe liberal accounts).

I will defer to this web page that factually and accurately describes deficit spending under Obama. Hint: It is not actually the Right’s estimate of $7.7 Trillion OR the Left’s estimate of $983 Million.

Forget about budget reduction — will never happen under any President. Today’s economics, finances, and the meaning of a dollar is in an unrealistic world. Nobody cares about overspending, underemployment, free benefits, corrupt incomes for businesses, wasteful projects — it means nothing to anybody anymore. I don’t know how much longer it can go on before reality sets in and there is total collapse of everything worldwide, but commonsense economics says it has to happen eventually.

Machine-learning algorithms are cleverly downloading faces from social media pages like Facebook… and then uploading those faces to unsavory videos. This is the latest example of technology moving faster than our moral ability to use it.

One mystery trader just rolled over a massive volatility bet that could pay out $260 million if he’s right again. Can you blame him? He’s got seven-plus years of the bull trend on his side. Well, none of that means squat if you’re Goldman Sachs.